Table of Contents Introduction: The Building and Personal Property Coverage Form, CP 00 10...1 ISO Building and Personal Property Coverage Form, CP 00 10...1 Property Coverage Forms...3 ISO Rules...3 Underwriting Property Risks...4 The National Underwriter Company Coverage Guides...6 Chapter 1: The Insuring Agreement: Covered and Not Covered Property...7 Section A. Coverage... 7 Section A.1. Covered Property... 10 Section A.2. Property Not Covered... 32 Chapter 2: Additional Coverages, Coverage Extensions, and Optional Coverages...43 Additional Coverages...43 Section 4. Additional Coverages...43 Section 5. Coverage Extensions... 53 Optional Coverages...64 Chapter 3: Covered Causes of Loss Named Perils Forms... 73 CP 10 10 Causes of Loss Basic Form...73 CP 10 20 Broad Form Causes of Loss...87 Exclusions That Apply to Both Named Perils Causes of Loss Forms...90 Subsection B.2. Exclusions...99 Special Exclusions...101 Additional Coverages...101 Chapter 4: Special Causes of Loss Form (CP 10 30)...107 Similarities to Named Perils Forms...109 Fortuity Doctrine...110 Open Perils Exclusions Section B.2....111 Section 2.d.(1) to (7) Exclusions...112 Other Exclusions...119 Concurrent Causation Exclusions...124 Special Exclusions...129 Limitations...129 vii
Additional Coverages and Limitation...134 Additional Coverage Extensions...134 Chapter 5: Conditions... 137 Commercial Property General Conditions...137 Commercial Property Policy Conditions...141 Other Relevant Provisions of the Building and Personal Property Coverage Form...148 Loss Conditions...151 The Insured s Duties in the Event of Loss...153 Actual Cash Value Defined...159 Valuing Business Personal Property...160 Recovered Property...161 Vacancy...161 Valuation...162 Additional Conditions...164 Chapter 6: Builders Risk... 171 ISO Eligibility and Rules...171 Covered Property...174 Property Not Covered...175 Covered Causes of Loss...176 Additional Coverages...176 Coverage Extensions...176 Limits of Insurance...177 Deductible...177 Loss Conditions...177 Additional Conditions...178 Builders Risk Coverage Options...180 Building Renovations...180 Builders Risk Reporting Form...180 Separate or Subcontractors Interest...181 Collapse During Construction...181 Theft of Building Materials, Fixtures, Machinery, Equipment...182 Building Materials and Supplies of Others...183 Who Can Be Covered...183 Limited Usage...184 Chapter 7: Business Income Coverage Forms... 185 Coverage for Business Income...186 When Coverage Applies...187 Extra Expense...188 viii
Extended Loss after Operations Resume...188 Blanket Coverage...189 ISO Simplified Business Income Program...189 Extra Expense...194 Covered Causes of Loss...196 Exclusions and Limitations...196 Additional Limitation...199 Additional Coverages...199 Civil Authority...199 Alterations and New Buildings...203 Extended Business Income...204 Interruption of Computer Operations...204 Expense to Reduce Loss...205 Coverage Extension...206 Limits of Insurance...207 Loss Conditions...208 Loss Determination...209 Other Loss Conditions...210 Coinsurance...211 Optional Coverages...213 Maximum Period of Indemnity...213 Monthly Limit of Indemnity...214 Agreed Value...215 Extended Period of Indemnity...216 Extra Expense Insurance...216 Insured May Need Both...217 Extra Expense Coverage Form, CP 00 50...218 Causes of Loss...219 Additional Limitation Interruption of Computer Operations...220 Coverage Extension and Additions...220 Limits...221 Other Insurance...222 Other Exposures...223 Ingress and Egress...223 Flood...223 Absence of Profits...224 Chapter 8: Leasehold Interest Coverage Form, CP 00 60... 227 Chapter 9: Mortgageholders Errors and Omissions Coverage Form, CP 00 70... 233 The Four Coverage Agreements...234 Exclusions...238 ix
Limits of Insurance...240 Additional Coverage Collapse...240 Additional Coverage Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria...241 Additional Conditions...242 Conditions Applicable to All Coverages...243 Definitions...247 Chapter 10: Tobacco Sales Warehouses Coverage Form, CP 00 80... 249 Chapter 11: Condominium Association Coverage Form, CP 00 17, and Commercial Condominium Unit-Owners Coverage Form, CP 00 18... 253 Condominium Association Coverage Form, CP 00 17...253 Commercial Condominium Unit-Owners Coverage Form, CP 00 18...257 Chapter 12: Legal Liability Coverage Form, CP 00 40... 261 Coverage...263 Coverage Extensions Additional Insureds and Newly Acquired Organizations...264 Newly Acquired Property...265 Causes of Loss and Exclusions...266 Loss Conditions...266 Additional Conditions...267 Chapter 13: Commercial Property Endorsements... 269 Additional Building Property, CP 14 15...269 Additional Covered Property, CP 14 10...269 Additional Exclusions, CP 10 50... 270 Additional Insured Building Owner, CP 12 19...270 Additional Locations Special Coinsurance Provisions, CP 13 20...270 Additional Property Not Covered, CP 14 20...271 Agricultural Products Storage, CP 13 30...273 Alcoholic Beverages Tax Exclusion, CP 99 10...273 Brands And Labels, CP 04 01...274 Broken Or Cracked Glass Exclusion Form, CP 10 52...274 Builders Risk Theft Of Building Materials, Fixtures, Machinery, Equipment, CP 11 21...274 Building Glass Tenant s Policy, CP 14 70...275 x
Burglary And Robbery Protective Safeguards, CP 12 11...275 Business Income Changes Beginning Of The Period Of Restoration, CP 15 56... 276 Business Income Changes Educational Institutions, CP 15 25...277 Business Income From Dependent Properties Broad Form, CP 15 08...277 Business Income From Dependent Properties Limited Form, CP 15 09...278 Business Income From Dependent Properties Limited International Coverage, CP 15 01... 278 Business Income Landlord As Additional Insured (Rental Value), CP 15 03...280 Business Personal Property Limited International Coverage, CP 04 32...280 Cap on Losses From Certified Acts Of Terrorism, IL 09 52...280 Changes Electronic Data, CP 01 70...281 Civil Authority Change(s), CP 15 32...282 Condominium Commercial Unit-Owners Changes Standard Property Policy, CP 17 98...283 Condominium Commercial Unit-Owners Optional Coverages, CP 04 18...283 Contributing Insurance, CP 99 20...284 Debris Removal Additional Insurance, CP 04 15...284 Deductibles By Location, CP 03 29...284 Deductible Limitation, CP 03 10...284 Discharge From Sewer, Drain Or Sump (Not Flood- Related), CP 10 38...285 Disclosure Pursuant To Terrorism Risk Insurance Act, IL 09 85...285 Discretionary Payroll Expense, CP 15 04...286 Distilled Spirits And Wines Market Value, CP 99 05...286 Earthquake And Volcanic Eruption Endorsement Form, CP 10 40, and Earthquake And Volcanic Eruption Endorsement (Sub-Limit Form), CP 10 45...287 Earthquake Inception Extension, CP 10 41................... 288 Electrical Apparatus, CP 04 10...289 Electronic Commerce (E-Commerce), CP 04 30...289 Equipment Breakdown Cause Of Loss, CP 10 46...291 Exclusion Of Loss Due To By-Products Of Production Or Processing Operations (Rental Properties), CP 10 34...292 Extra Expense From Dependent Properties, CP 15 34...292 Extra Expense From Dependent Properties Limited International Coverage, CP 15 02... 293 xi
Flood Coverage Endorsement, CP 10 65...293 Flood Coverage Schedule, CP DS 65...294 Food Contamination (Business Interruption And Extra Expense), CP 15 05...294 Functional Building Valuation, CP 04 38...295 Functional Personal Property Valuation (Other Than Stock), CP 04 39...297 Grain Properties Explosion Limitation, CP 10 51...298 Higher Limits, CP 04 08...298 Household Personal Property Coverage, CP 99 92...298 Increase In Rebuilding Expenses Following Disaster (Additional Expense Coverage On Annual Aggregate Basis), CP 04 09...299 Increased Cost Of Loss And Related Expenses For Green Upgrades, CP 04 02...299 Leased Property, CP 14 60...300 Legal Liability Coverage Schedule, CP DS 05... 300 Limitation On Loss Settlement Blanket Insurance (Margin Clause), CP 12 32...300 Limitations On Coverage For Roof Surfacing, CP 10 36...302 Limitations On Fungus, Wet Rot, Dry Rot And Bacteria, CP 01 71...302 Loss Payable Provisions, CP 12 18...302 Manufacturers Consequential Loss Assumption, CP 99 02...304 Manufacturer s Selling Price (Finished Stock Only), CP 99 30...304 Market Value Stock, CP 99 31...304 Molten Material, CP 10 60...304 Multiple Deductible, CP 03 20...305 Multiple Location/Premium And Dispersion Credit Application, CP 13 70...305 Newly Acquired Or Constructed Property Increased Limit, CP 04 25...305 Off-premises Interruption Of Business Vehicles And Mobile Equipment, CP 15 06...305 Ordinance Or Law Coverage, CP 04 05...306 Ordinance Or Law Increased Period Of Restoration, CP 15 31...308 Outdoor Trees, Shrubs And Plants, CP 14 30...308 Outdoor Signs, CP 14 40...309 Payroll Limitation Or Exclusion, CP 15 10... 309 Peak Season Limit Of Insurance, CP 12 30...310 Pier And Wharf Additional Covered Causes of Loss, CP 10 70...310 xii
Pollutant Cleanup And Removal Additional Aggregate Limit Of Insurance, CP 04 07...310 Property In Process Of Manufacturing By Others Limited International Coverage, CP 04 33...311 Protective Safeguards, CP 04 11...311 Radio Or Television Antennas, CP 14 50...312 Radioactive Contamination, CP 10 37...313 Report Of Values, CP 13 60, and Supplemental Report Of Values, CP 13 61...313 Specified Business Personal Property Temporarily Away From Premises, CP 04 04...314 Spoilage Coverage, CP 04 40...314 Sprinkler Leakage Earthquake Extension, CP 10 39...315 Sprinkler Leakage Exclusion, CP 10 56... 315 Storage Or Repairs Limited Liability, CP 99 42...316 Suspension Or Reinstatement Of Coverage For Loss Caused By Breakdown Of Certain Equipment, CP 10 47...316 Tentative Rate, CP 99 93...316 Terrorism Endorsements...316 Theft Exclusion, CP 10 33...317 Theft Of Building Materials And Supplies (Other Than Builders Risk), CP 10 44...317 Utility Services Direct Damage, CP 04 17...317 Utility Services Time Element, CP 15 45...319 Vacancy Changes, CP 04 60...319 Vacancy Permit, CP 04 50...320 Value Reporting Form, CP 13 10...320 Vandalism Exclusion, CP 10 55... 321 Water Exclusion Endorsement, CP 10 32...321 Watercraft Exclusion, CP 10 35...321 Windstorm Or Hail Exclusion, CP 10 54...321 Windstorm Or Hail Exclusion Direct Damage, CP 10 53...322 Windstorm Or Hail Percentage Deductible, CP 03 21...322 Your Business Personal Property Separation Of Coverage, CP 19 10...323 Chapter 14: The Commercial Properties Program of American Association of Insurance Services (AAIS)...325 Building and Personal Property Coverage Part...326 Supplemental Coverages...329 Special Perils Part...337 Other Coverage Parts...343 Endorsements...343 xiii
Chapter 15: The Mutual Service Office Commercial Property Program...347 General Property Form, MCP 010...347 Insuring Agreement...347 Part I A Main Property Coverages...348 Part I B Supplemental Coverages...355 Part I C Cause of Loss Options...365 Part I D Property Exclusions/Limitations...368 Part I E Property Loss Limitations...370 Part I F Losses Not Insured...372 Part I G Special Part I Conditions...374 Part I H Glossary...381 Part I Common Conditions...381 Part I Common Exclusions...385 Endorsements Preprinted in the MSO General Property Form...386 Chapter 16: E-Issues under the Building and Personal Property Coverage Form...389 Cyberspace What Is It?...389 Intangible Property...390 Insuring Intangible Assets...392 The Meaning of Property...393 E-Property Policies...396 Chapter 17: Miscellaneous Commercial Property Coverage Issues...399 ISO Interline Terrorism Endorsements...399 Catastrophic Weather Loss Claims Issues...402 Wind, Water, and Wind-Driven Water...403 Wind Percentage Deductible...405 Chinese Drywall...414 Green Building Coverage Issues...420 Marijuana Manufacturing/Distribution...425 Income Disruption Insurance...425 Specimen Forms Building and Personal Property Coverage Form, CP 00 10 10 12...429 Condominium Association Coverage Form, CP 00 17 10 12...445 Condominium Commercial Unit-Owners Coverage Form, CP 00 18 10 12...460 Builders Risk Coverage Form, CP 00 20 10 12....473 xiv
Business Income (and Extra Expense) Coverage Form, CP 00 30 10 12...480 Legal Liability Coverage Form, CP 00 40 10 12...489 Leasehold Interest Coverage Form, CP 00 60 06 95...493 Mortgageholders Errors and Omissions Coverage Form, CP 00 70 10 12...497 Tobacco Sales Warehouses Coverage Form, CP 00 80 10 12...510 Commercial Property Conditions, CP 00 90 07 88...515 Causes of Loss Basic Form, CP 10 10 10 12...517 Causes of Loss Broad Form, CP 10 20 10 12...523 Causes of Loss Special Form, CP 10 30 10 12...531 Common Policy Conditions, IL 00 17 11 98...541 Building and Personal Property Coverage Part, AAIS CP 12...542 General Property Form, MCP 010 06 12...551 Index...575 xv